COURT FILE NO.: CV-18-591906

DATE: 2018-03-02

SUPERIOR COURT OF JUSTICE - ONTARIO

B E T W E E N:

THE CORPORATION OF THE TOWNSHIP OF KING, Applicant/Moving Party

• and -

2424155 ONTARIO INC., Respondent

BEFORE: Copeland, J.

HEARD: February 15, 2018

COUNSEL: John Longo and Patrick Copeland, appearing for the Applicant

Sarah Zakir, appearing for the Respondent

ENDORSEMENT

[1] The Township of King has brought an application for an injunction pursuant to s. 440 of the Municipal Act to restrain the respondent, 2424155 Ontario Inc., from contravening a by-law and a stop work order made under the by-law. The Township has brought a motion for an interlocutory injunction pending the hearing of the application. 242 resists the motion.

[2] As I will explain, there is a related application in which 242 seeks to have the fees under the by-law declared ultra vires of the municipality’s authority, and to have the stop work order set aside. In these reasons, I will refer to both applications. Since each party is applicant in one of the proceedings and respondent in the other, for reasons of clarity I will refer to the parties as “the Township” and “242”.

Factual Background

[3] 242 owns a 100 acre parcel of semi-rural land in King Township, which it acquired in April 2016 (“the property”). On the East side, the property abuts Highway 400.

[4] Kent Nicholson is one of the principals of 242. For several years, both before and after 242’s purchase of the property, Mr. Nicholson and his representatives met with representatives of the Township to discuss planning issues related to various potential uses of the property.

[5] As part of the development of the property, Mr. Nicholson and 242 wish to construct a large berm on the East side of the property, where it abuts Highway 400. Mr. Nicholson wants to construct the berm to provide an acoustic and visual barrier between the property and Highway 400.

[6] 242 has advised the Township that it intends to dump a total of 500,000 cubic metres of fill on the property. This would require 50,000 truckloads of fill.

[7] The Township has a fill control by-law, by-law 97-84. The by-law creates a system of permits to regulate dumping of fill. In addition, the by-law contains a number of exceptions, where the by-law does not apply. One of the exceptions is for “landscaping”. I will address the by-law in more detail further on in these reasons.

[8] Without getting into the details of Mr. Nicholson’s discussions with the Township about bringing fill to the property, it suffices for present purposes to say that the Township took the position, and continues to take the position, that Mr. Nicholson requires a permit to bring the fill he wants to bring to construct the berm. For his part, Mr. Nicholson takes the position that building the berm is “landscaping”, and thus falls within the exception in s. 3(7) of the by-law.

[9] At some point in January 2017, 242 began receiving truckloads of fill at the property. 242 does not have a permit to bring fill to the property, and has not applied for a permit.

[10] The Township became aware of the activity in late January 2017. On February 1, 2017, the Township issued a “Site Alteration Order” pursuant to which 242 was ordered to stop all importation of fill and site alteration immediately (I will refer to the Site Alteration Order as the “stop work order”, as that is how counsel referred to it during argument).

[11] Despite being served with the stop work order, on February 8, 2017, the Township discovered that 242 was continuing to dump large amounts of fill at the property. The Township directed Mr. Nicholson to cease this activity.

[12] On February 17, 2017, 242 filed an application (court file no. CV-17-570028) which is related to the matter before me. 242’s application seeks, among other relief, a declaration that the fees under by-law 97-84 are ultra vires the Township, and an order setting aside the stop work order. The thrust of 242’s argument in the other application is twofold: (1) that the bringing of fill to the property to construct the berm falls within the “landscaping” exception in the by-law, and so does not require a permit; and (2) that the fees associated with the by-law’s permit process exceed the amount necessary to carry out the regulatory scheme, and thus are a tax and in excess of the Township’s legislative authority. In this respect, 242 relies on cases such as Eurig Estate (Re), 1998 CanLII 801 (SCC), [1998] 2 S.C.R. 565, and Angus v. Corporation of the Municipality of Port Hope, 2016 ONSC 3931.

[13] When it filed its application, 242 brought a motion for an interlocutory injunction to prevent enforcement of the by-law and the stop work order, and to allow it to continue bringing fill to the property. That motion was heard by Justice Stinson on February 24, 2017. Justice Stinson dismissed the motion for an interlocutory injunction on March 1, 2017. Justice Stinson held that 242 had failed to satisfy any of the three branches of the test for an interlocutory injunction: 2424155 Ontario Ltd. v. King (Township), 2017 ONSC 1406.

[14] Various procedural steps continued in 242’s application after that time. However, things were quiet in relation to dumping activities at 242’s property for the next approximately 11 months.

[15] On February 8, 2018, the Township became aware that 242 was again bringing fill to be dumped at the property. The Township believes that 242 resumed bringing fill to the property in January 2018. 242 does not deny that it has resumed bringing large quantities of fill to the property. When the Township’s by-law inspectors attended at the property on February 8, 2018, they observed dump trucks driving to and from the property and dumping fill. Mr. Nicholson told them that 23 trucks had dumped fill on the property so far, and 40 were slated to attend the property that day.

[16] As a result of finding out about the resumption of dumping at the property, the Township filed the new application and brought the current motion for an interlocutory injunction to enforce compliance with the Township’s fill control by-law.

The By-law at issue

[17] The by-law that underlies this litigation and the related application is the Township’s by-law 97-84. In general terms, the by-law regulates the dumping of fill on properties within the Township.

[18] Sections 2(1) and (2) of the by-law provide that no person shall dump fill or cause fill to be dumped in the Township, or alter the grade of land in the Township, except in accordance with the by-law. Sections 2(3) and (4) provide that (subject to listed exceptions in s. 3), no person shall dump fill or cause fill to be dumped without a permit, and that any alterations to grade must be in accordance with the terms of the permit.

[19] Section 3 of the by-law contains a number of specific exceptions when they by-law does not apply. For the purposes of this motion, only s. 3(7) is relevant. It provides that the provisions of the by-law do not apply:

3(7) Where fill is placed on lands zoned for residential use within the meaning of the Zoning By-Law for the purposes of lawn dressing, landscaping, adding to flower beds or vegetable gardens, provided that:

(a) The elevation of the land within 600 mm of the property line is not changed; and

(b) There is no change in the location, direction or elevation of any natural or artificial watercourse, open channel, swale or ditch used to drain land.

[20] I pause to note that a key legal dispute in this application and the related application brought by 242 is the meaning of “landscaping” in s. 3(7) of the by-law.

[21] Section 4(1) of the by-law contains a number of general prohibitions and regulations. These provisions effectively delimit the scope of when a permit for dumping will be issued. Section 4(2) provides as follows:

4(2) No person may place or dump fill or cause fill to be placed or dumped and no person may alter the grade of any land or cause the grade of any land to be altered in the Township without a Permit where the volume of the fill being placed or dumped or the volume of the fill involved in the alteration exceeds fifty (50) cubic metres.

[22] Section 5 of the by-law sets out the procedures for the issuance of a permit.

[23] Sections 6 and 7 of the by-law address enforcement, remedies, and penalties, including the creation of an offence under the Provincial Offences Act for contravening the by-law.

[24] As I have mentioned, 242’s position in the related application is that the fees associated with the by-law are ultra vires. However, 242 also argues that its dumping falls within the exception for “landscaping” in s. 3(7) of the by-law.

Section 440 of the Municipal Act

[25] The Township relies on s. 440 of the Municipal Act 2001, S.O. 2001, c. 25, as the source of the legal authority to grant the interlocutory injunction is seeks, as well as s. 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[26] Section 440 of the Municipal Act provides as follows:

440. If any by-law of a municipality or by-law of a local board of a municipality under this or any other Act is contravened, in addition to any other remedy and to any penalty imposed by the by-law, the contravention may be restrained by application at the instance of s taxpayer or the municipality or local board. [emphasis added]

[27] When this matter was first returnable on an interim basis on February 9, 2018, I denied an interim injunction on the basis that I was not satisfied that an injunction was necessary under the second and third branches of the RJR-MacDonald analysis, because there was no evidence that the Township had taken steps to enforce the stop work order in any other way under the general provisions to enforce by-laws in provincial legislation. On February 9, 2018, neither party had briefed the issue of whether the Township had a legal obligation to attempt other remedies prior to seeking an injunction. Section 440 of the Municipal Act was not argued in any detail on that date.

[28] Having now heard full argument in relation to s. 440 of the Municipal Act, and reviewed cases in relation to injunctions granted under s. 440. I find that s. 440 shows a clear legislative intention that a restraining order (i.e., an injunction) is one of the remedies available to a municipality or a taxpayer to seek a remedy for contravention of a by-law. There is no requirement to exhaust other remedies. Indeed, the language in s. 440 “in addition to any other remedy and to any penalty imposed by the by-law” indicates a legislative intent that a restraining order is one of the tools available to municipalities (and taxpayers) to enforce compliance with municipal by-laws: Springwater (Township) v. 829664 Ontario Ltd., 2008 CanLII 8261 at paragraph 8 (ONSC).

[29] Further, the Township has provided affidavit evidence addressing why other enforcement mechanisms are insufficient, particularly in relation to timeliness of enforcement. Prosecutions for breach of the by-law may be instituted under the Provincial Offences Act, but these take time to make their way through court, and do not stop the ongoing dumping.

Serious issue to be tried

[30] The first branch of the analysis for an interlocutory injunction requires me make a preliminary assessment of the merits of the case to consider if there is a serious issue to be tried: RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311 at pp. 334-340, and 347-349.

[31] In this application, based on RJR-MacDonald and s. 440 of the Municipal Act, I must consider whether the record on the motion allows me to find that there is a serious issue to be tried that 242 is contravening by-law 97-84. This involves two sub-issues: (1) factually, what actions are being taken by 242 with respect to the property; and (2) do those actions contravene the by-law?

(i) Actions by 242 at the property

[32] The first issue is not really subject to dispute. The Township has filed credible evidence that it became aware on February 8, 2018, that a large number of dump trucks were attending at 242’s property and dumping loads of fill. This evidence is credible and detailed, and I accept it for the purposes of the motion.

[33] Indeed, 242 does not deny that it has resumed bringing fill to its property. Rather, what 242 disputes is the legal characterization of its actions (whether it is “landscaping”, which I will address below). Paragraphs 14 to 21 of the affidavit of Mr. Nicholson say essentially that he became frustrated with the delays in the hearing of the related application, that he believes his activity of bringing fill to the property is within the “landscaping” exception in the by-law, that he believes that the fees in the by-law are ultra vires, and that for that reason, “[242] proceeded to resume the landscaping of its earth berm”. That is, he admits that 242 has resumed bringing truckloads of fill to the site, without obtaining a permit.

[34] Despite losing the motion to obtain an interlocutory injunction in the related application, 242 has resorted to the self-help remedy of dumping fill, based on its own view that its activities constitute “landscaping”, and its view that the fees under the by-law are ultra vires.

[35] I am satisfied that the Township has shown that 242 resumed dumping large volumes of fill at the property in early February 2018. I turn then to the second issue, whether the Township has shown there is a serious issue to be tried that the dumping of fill by 242 contravenes the by-law.

(ii) Is there a serious issue to be tried that the actions by 242 at the property contravene by-law?

[36] The Township argues that the by-law requires a permit to dump more than 50 cubic metres of fill. The Township argues that the large quantities of fill being brought to the property by 242 do not fall within the “landscaping” exception in the by-law.

[37] 242 argues that its actions do not contravene the by-law because it is engaging in landscaping, and thus its activities fall within the exception in s. 3(7) of the by-law.

[38] I find that there is a serious issue to be tried that the actions of 242 in bringing in large volumes of fill contravenes the by-law and the stop work order. I find that the Township has made the case sufficient for there to be a serious issue to be tried that the dumping conducted by 242 does not fall within the exception for landscaping in s. 3(7) of the by-law. I come to this conclusion for two reasons.

[39] First, according to ordinary principles of statutory interpretation, the words of legislation (here, a by-law) are to be read in their entire context, and in their grammatical and ordinary sense, harmoniously with the scheme of the legislation, the object of the legislation, and the intention of the government body that passed the law or by-law: Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27.

[40] According to this principle, I must read each section of the by-law in the context of the whole by-law, the purpose of the by-law, and the intention of the by-law. Section 3(7) of the by-law cannot be read in isolation, but must be read within the context of the whole by-law. It is clear that reading the by-law as a whole, it seeks to regulate dumping by requiring permits for dumping. The exception in s. 3(7) must be read in harmony with the general prohibition in s. 4(2) of dumping fill in excess of 50 cubic metres without a permit. The purpose of the by-law of controlling dumping would be very significantly weakened if the exceptions in s. 3 were read disjunctively from the prohibition in s. 4(2) on dumping over 50 cubic metres of fill without a permit. For this reasons, I accept that the Township has a strong argument that the exception for landscaping in s. 3(7) of the by-law does not apply if the amount of fill to be dumped exceeds 50 cubic metres.

[41] Second, even reading s. 3(7) alone, reading the terms within s. 3(7) as associated words having similar meanings leads to the conclusion that the exception in s. 3(7) does not apply to large volume dumping. Reading together the terms in the exception in s. 3(7), including that it applies to lands zoned for residential use, and the words “lawn dressing”, “landscaping”, “adding to flower beds or vegetable gardens”, the text of s. 3(7) speaks to small amounts of fill used in ordinary residential gardening or landscaping – things such as soil, peat, manure, fertilizer used in ordinary residential gardening, or patio stones for landscaping, in quantities used in ordinary residential gardening or landscaping.

[42] The quantity of fill that 242 seeks to bring to build the berm, and has been in the process of bringing without a permit, is several orders of magnitude bigger than ordinary residential gardening or landscaping. The by-law requires a permit for dumping over 50 cubic metres of fill. 242 proposes to dump 500,000 cubic metres, 10,000 times the amount for which the by-law requires a permit.

[43] In summary, although I am not bound by it, I am in agreement with Justice Stinson’s interpretation of the by-law in his reasons given in the interlocutory injunction motion in the related application, at paragraphs 20-24.

[44] 242 seeks to argue on this motion, as a reason that the court should find that the Township has not shown a serious issue to be tried, its position from the related application that the fees under the by-law are ultra vires.

[45] Respectfully, that is not an issue that arises in this application or this motion. In this application the Township seeks to enforce the by-law by way of injunctive relief available under s. 440 of the Municipal Act. 242 is subject to the by-law. 242 is not entitled in response to the Township’s attempt to enforce its presumptively valid by-law to argue that the by-law is ultra vires. If 242 were charged under the by-law, it would be entitled to argue the issue about the validity of the by-law under the principle in R. v. Big M Drug Mart Ltd., 1985 CanLII 69 (SCC), [1985] 1 S.C.R. 295. But the Big M principle only applies to prevent a person (or corporation) from being convicted of a criminal or quasi-criminal offence under an invalid law. It has no application to the civil dispute before the court.

[46] The other way that 242 could raise the ultra vires argument is by bringing its own direct challenge to the by-law. Indeed, 242 has done this in the related application. That application has not yet been adjudicated on its merits. As I have outlined above, 242 sought an interlocutory injunction to prevent enforcement of the by-law and the stop work order, and to allow it to continue bringing fill to the property. Justice Stinson rejected that motion.

[47] 242 now argues that Justice Stinson refused to consider its ultra vires argument at the hearing of the interlocutory injunction motion. I note that although Justice Stinson says nothing in his reasons addressing the ultra vires argument, there is also nothing in his reasons saying he refused to consider any particular arguments made by 242 on the motion. Assuming for the sake of argument that Justice Stinson did refuse to consider 242’s ultra vires argument in the interlocutory injunction motion in the other application, the proper remedy if 242 disagreed with that decision was to seek leave to appeal the decision, not to seek to re-argue the ultra vires issue in the Township’s new application.

[48] I will not consider the ultra vires arguments made by 242. This is not the appropriate forum to make them.

[49] For these reasons I find that the Township has proven that there is a serious issue to be tried that 242 is contravening the by-law and the stop work order.

Irreparable Harm

[50] The next issue I must consider is whether there will be irreparable harm to the Township if an interlocutory injunction is refused: RJR-MacDonald, supra at pp. 334, 341-342, and 347-349.

[51] Where a government entity is the party seeking an injunction, the public interest is relevant at both the second and third stages of the assessment, as the primary irreparable harm that a government entity will usually assert will be harm to the public interest: RJR-MacDonald, supra at p. 349; Scugog (Township) v. 2241960 Ontario Inc., 2011 ONSC 1598 at paragraphs 6-9.

[52] In the context of a government body seeking to enforce legislation (or in this case, a by-law), the case law is clear that irreparable harm is generally presumed. The reason for this is that, in general, government is presumed to act in the public interest: RJR MacDonald, supra at pp. 345-347, and 349.

[53] I find nothing in the record that leads me to find that I should depart from the presumption that the elected municipal government of the Township is acting in the public interest, and that the by-law was enacted to serve a public purpose.

[54] Indeed, the evidence filed by the Township supports the existence of the harms caused by unregulated dumping that the by-law is designed to prevent. Unregulated dumping can cause environmental harm because it can change the grade of land and affect water flow, and because if fill is contaminated, it can be hazardous and costly to remediate. I want to be clear that I am not finding as a fact that the fill that 242 is bringing to the property is contaminated, or that the location where the fill is being dumped is affecting water flow. The record before me does not address that issue. But the permit system that the Township has in place is designed to allow the Township to consider the nature of the particular proposed dumping before it occurs, in order for environmental concerns to be considered by the Township. 242’s action of dumping fill without a permit prevents that consideration that the by-law is designed to achieve.

[55] 242 argues that it has filed evidence in the related application that there is no environmental or other harm caused by its dumping. Respectfully, in this context of this application and this motion, that evidence misses the point. The lawfully elected municipal government has passed a by-law with various requirements, including a permit requirement, before large volume dumping can occur on property located in the municipality. 242 has chosen not to apply for a permit, and in the related application, to challenge the validity of the by-law. 242 was denied an interlocutory injunction in the related application. The irreparable harm which is relevant at this stage, is the harm from a democratically enacted by-law setting up a permit regime not being followed. It is not for 242 to take it upon itself not to follow the regime set up under the by-law, unless and until the by-law is found ultra vires.

[56] For these reasons, I find that the Township will suffer irreparable harm if the interlocutory injunction is not granted.

Balance of Convenience

[57] The third branch of the analysis is a consideration of the balance of convenience: RJR-MacDonald, supra at pp. 334, and 342-349. I must consider which of the parties would suffer greater harm from the granting or refusal of an interlocutory injunction.

[58] I find that the balance of convenience favours the Township. The Township is seeking to enforce its democratically enacted by-law. The affidavit evidence filed by the Township on the motion supports the risk of harm from uncontrolled dumping on the environment, and also the problem that if the dumping is allowed to continue, there is a real risk that the Township and taxpayers may end up having to foot the bill for remediation in the event that 242 loses the related application and the by-law is upheld.

[59] The respondent argues that if the injunction is granted, it will suffer the harm of having to wait 6 months to one year to continue building the berm, thus delaying its plans to develop the property. This time frame is based on estimated time for 242’s application to be heard, and the fact that transportation of soil to build the berm is seasonal, and cannot be done in the winter months.

[60] I find that the delay in the respondent’s plans to develop the property is outweighed by the public interest in enforcing the by-law unless and until it is declared ultra vires. This is particularly so given the history of these proceedings, including the related application brought by 242.

[61] As I have outlined, 242 brought its own application challenging the by-law as ultra vires, and seeking to set aside the stop work order. That application has not yet been heard on the merits. It is likely to be heard later this year, in accordance with the timetable set by Justice Archibald. In that application, 242 sought an interlocutory injunction to prevent enforcement of the by-law and the stop work order, and to allow it to continue bringing fill to the property. Justice Stinson denied that relief. All of the steps to that point were legal actions that 242 was perfectly entitled to pursue. 242 is also entitled to pursue its application through to a hearing and decision on whether the fees under the by-law are ultra vires.

[62] But having taken these steps, and lost its motion for interlocutory relief, 242 frustrated by the fact that its application has not yet been heard, decided that it would take matters into its own hands, and resume bringing fill to the property in early 2018, without a permit, and prior to any court deciding that the by-law is ultra vires.

[63] This action of resuming dumping was based on its own interpretation of the by-law, and its own belief that the by-law was ultra vires. As I have noted, Justice Stinson had already rejected this interpretation of the by-law for the purposes of the interlocutory injunction motion he heard. As Justice Stinson recognized, his reasons are not the last word on interpretation of the by-law (Reasons of Justice Stinson at paragraph 19). The last word will come when 242’s application is heard on the merits. But Justice Stinson’s interpretation of the by-law is the one that governs until 242’s application is heard. 242 took no steps to seek leave to appeal Justice Stinson’s decision.

[64] In light of this history, I find that 242’s decision to engage in self-help by resuming dumping, after it lost its motion for interlocutory relief before Justice Stinson, has the effect that it is coming before the court without clean hands. As injunctive relief is an equitable remedy, this is a factor I consider in assessing the balance of convenience.

[65] During the argument of the motion, counsel for 242 repeatedly stated that 242 was “following the law”, but that it disputed the fees involved in the by-law’s permit process. With respect, the by-law requires a permit. 242 has not even applied for a permit. 242 is not following the law.

[66] Both parties made submissions to me blaming the other party for various delays to date in the hearing of 242’s application. I make no findings as to who is to blame for the delays, or indeed, if anyone is to blame, in the sense that the delay may just be within the scope of ordinary delays in litigation. In my view, the issue of past delay is not relevant at this point, because Justice Archibald made an order in CPC Court on January 5, 2018, setting a schedule for various steps in the related application.

[67] For these reasons, I find that the balance of convenience favours the Township.

Duration of the Order

[68] For the reasons given above, the motion is granted and an interlocutory injunction order is granted.

[69] At the close of the hearing on February 15, 2018, I granted an interim injunction pending these reasons on the interlocutory injunction motion. The terms of the interlocutory injunction that I order today are for the most-part the same as interim order I made on February 15, 2018. The only difference is with respect to the duration of the interlocutory order (i.e., paragraph 1 of the order I made on February 15, 2018). The interlocutory order will be in place:

Pending the final adjudication of this application, and the entering and issuing of the order if a permanent injunction is granted. In the event that 2424155 Ontario Inc. is successful in the related application in court file no. CV-17-570028, and by-law 97-84 is found to be in whole or in part ultra vires, either party may bring a motion on notice to have this interlocutory injunction set aside or varied.

[70] I want to briefly address my reasons for framing the duration of the interlocutory injunction in this way. In its notice of motion, the Township requested that the interlocutory injunction be granted “pending adjudication of 242’s application” (i.e., the related court file). I asked counsel about this at the hearing of this motion, as it struck me as unusual to tie the length of this interlocutory injunction to the other proceeding (although clearly they are very closely factually and legally related). For example, it is possible that the Township may still want to pursue its application for a permanent injunction, even if 242 loses the related application, as I was told during the hearing that the local police are hesitant to assist with enforcement of the by-law in the absence of a court order. This factor speaks to ordering the interlocutory injunction to last until this application is adjudicated. On the other hand, in the event 242 wins the related application, and the by-law, or part of it, is found to be invalid, the legal grounding for the injunction I am granting today may fall away. If that were the case, continuing the injunction may be unjust. The terms for the duration of the interlocutory injunction I have set out in paragraph 69 above seek to address these two possibilities.

[71] One option I raised at the hearing was that it would appear to make sense in terms of efficiency for both applications to be heard together. They turn on essentially the same factual and legal issues, except that this application is narrower than the application brought by 242, as it does not raise the issue of the validity of the by-law. During the argument of the motion, counsel for 242 was concerned about her ability to respond to this application at the same time as pursuing the other application.

[72] Since I raised the issue of ordering the two applications to be heard together during the hearing, and without advance notice for the parties to consider it in depth, I will not make that order today. But I urge counsel to discuss it further, because it is not apparent to me that it will require much more work for 242 to respond to the Township’s application at the same time as its own application is heard. I would expect the same record, or mostly the same record could be relied on in both applications.

Costs

[73] I did not hear costs submissions at the hearing of the motion. I urge the parties to try and come to an agreement on costs. If the parties are unable to come to an agreement within 30 days, they may each serve and file a cost outline, and costs submissions not to exceed 3 pages, within a further 20 days. No reply submissions on costs may be filed without leave.

[74] Finally, for purposes of the public record, I note that Mr. Copeland who is co-counsel for the Township is not related to me.

Justice J. Copeland

Released: March 2, 2018